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Game‐Theoretic Modelling of Transboundary Pollution

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  • Fanny Missfeldt

Abstract

Transboundary pollution is pollution which is emitted in one country, and deposited or causing harm in another country. Due to the absence of a supranational institution that could enforce international legislation, transboundary externalities cannot be approached in the same way as domestic pollution problems. In an attempt to find non‐traditional solutions to such crossborder problems, recent environmental economics literature incorporates behavioural assumptions with the help of game theory. This paper discusses how different types of transboundary pollution have been approached, and which static and dynamic game theoretic solution concepts have been evaluated. While full cooperation among countries yields the economically optimal outcome it is difficult to reach, because countries are faced with an inequitable sharing of the burden of pollution abatement and with the incentive to free‐ride. Side payment schemes to aid burden sharing and strategies to circumvent free riding are reviewed. Issues such as transaction costs, information and motivation are briefly discussed.

Suggested Citation

  • Fanny Missfeldt, 1999. "Game‐Theoretic Modelling of Transboundary Pollution," Journal of Economic Surveys, Wiley Blackwell, vol. 13(3), pages 287-321, July.
    • Handle: RePEc:bla:jecsur:v:13:y:1999:i:3:p:287-321
    DOI: 10.1111/1467-6419.00084
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    Cited by:

    1. Norimichi Matsueda, 2002. "Asymmetrical information and delay of a side payment in unidirectional transboundary pollution," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 5(3), pages 229-247, September.
    2. Marianna Khachaturyan & Karina Schoengold, 2019. "Applying Interconnected Game Theory to Analyze Transboundary Waters: A Case Study of the Kura–Araks Basin," Water Economics and Policy (WEP), World Scientific Publishing Co. Pte. Ltd., vol. 5(01), pages 1-32, January.
    3. Carbone, Jared C. & Helm, Carsten & Rutherford, Thomas F., 2009. "The case for international emission trade in the absence of cooperative climate policy," Journal of Environmental Economics and Management, Elsevier, vol. 58(3), pages 266-280, November.
    4. Basak Bayramoglu, 2006. "Transboundary Pollution in the Black Sea: Comparison of Institutional Arrangements," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 35(4), pages 289-325, December.
    5. Li, Shaoshuai & Li, Zhigang & Ni, Jinlan & Yuan, Jia, 2023. "Growing pains for others: Using holidays to identify the pollution spillover between China and South Korea," China Economic Review, Elsevier, vol. 77(C).
    6. Norimichi Matsueda, 2004. "Potential Failure of an International Environmental Agreement under Asymmetric Information," Economics Bulletin, AccessEcon, vol. 17(4), pages 1-8.
    7. repec:dar:wpaper:35491 is not listed on IDEAS
    8. Conconi, Paola, 2003. "Green lobbies and transboundary pollution in large open economies," Journal of International Economics, Elsevier, vol. 59(2), pages 399-422, March.
    9. Liyuan Liu & Jing Zhu & Yibin Zhang & Xiding Chen, 2020. "An Optimal Pollution Control Model for Environmental Protection Cooperation between Developing and Developed Countries," IJERPH, MDPI, vol. 17(11), pages 1-20, May.
    10. Anindita Sen & Rajat Acharyya, 2013. "Can policies backfire? The impact of uncoordinated domestic policies on global pollution," Economics Bulletin, AccessEcon, vol. 33(4), pages 2682-2691.
    11. Shoji Haruna & Rajeev K. Goel, 2023. "Transboundary Pollution Control with Both Production and Consumption Emissions," CESifo Working Paper Series 10667, CESifo.
    12. Braouezec, Yann & Kiani, Keyvan, 2023. "Economic foundations of generalized games with shared constraint: Do binding agreements lead to less Nash equilibria?," European Journal of Operational Research, Elsevier, vol. 308(1), pages 467-479.
    13. Louis-Gaëtan Giraudet & Céline Guivarch, 2016. "Global warming as an asymmetric public bad," Working Papers 2016.26, FAERE - French Association of Environmental and Resource Economists.
    14. Yann BRAOUEZEC & Keyvan KIANI, 2021. "Economic foundations of generalized games with shared constraint: Do binding agreements lead to less Nash equilibria?," Working Papers 2021-ACF-06, IESEG School of Management.

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